Make sure you understand the National Living Wage (NLW) and National Minimum Wage (NMW) rates – and ensure you know what apprentices should be paid. Plus – find out what help and advice is available from the NHBF for your salon or barbershop.

This blog post covers:

New rates from April 2020

From April 2020, the new NMW/NLW rates will be:

From April 2020

NLW (OVER 25s)

£8.72 PH

NMW AGE 21 - 24

£8.20 PH

NMW AGE 18 - 20

£6.45 PH

NMW AGE 16 - 17

£4.55 PH

*APPRENTICES

£4.15 PH

 *An apprentice over the age of 19 who is in the second year of their apprenticeship must be paid the age-appropriate NMW/NLW.

Guide to National Minimum Wage

Our free expert guide to the NMW and NLW is available to NHBF Members only. It includes detailed information about how the NMW and NLW impact the hair, beauty and barbering industry.

Find out more about becoming a Member and join now for less than 80p a day.

Legal back up and support from the NHBF 

The NHBF offers a wide range of invaluable benefits including our unique 24/7, 365 days a year legal helpline for hair and beauty employment and HR issues – which is completely free for NHBF Members.

This indispensable legal backup provides sound and practical advice on how to deal with a range of common employment issues, from contracts, apprenticeship agreements, absence and holidays, to redundancy, managing staff performance and maternity arrangements.

Guide to apprenticeships

 

Stay up to date

• NLW and NMW rates change every year. Always check to make sure you are paying your salon or barbershop employees the right amount.

• It’s also important to keep on top of staff birthdays – your employee may be entitled to a higher rate of pay at some point during the year. It’s a good idea to set up automatic alerts on your computer system.

• If you have an accountant, don’t rely on them to alert you to rate rises and possible underpayments – make sure you understand what’s required and that everyone working in your salon or barbershop is being paid correctly. Remember: if you get something wrong you will be liable, not your payroll provider.

National minimum wage

What if you realise you're not paying an employee enough?

Don’t panic! Let HMRC know and tell them you will be putting things right. You will need to pay your salon or barbershop employee any arrears that you owe them and make sure they are on the correct rate from now on.

What could happen if you don’t pay the NLW or NMW?

Be aware that an employee or ex-employee would be entitled to report you to the HMRC which could result in an investigation and a fine of up to £20,000. You could also be publicly named and shamed by the government.

 Time to switch?

Coping with the costs of paying the NLW and NMW

There are three pieces of key advice when managing your budget: plan, plan, plan. To ensure the continued success and profitability of your salon or barbershop it’s vital to create a cash flow forecast. Find out how to take control of your cash flow.

You could also take positive steps to increase your income through innovation. For example, by offering new services or increasing your retail sales.

Thirdly, make sure you are making the most of marketing possibilities to boost your income by attracting new clients to your salon or barbershop. Find out how to market your salon for (almost) free.

Business Finances, Prices, Wages and Profits Guide

 

This guide will help you understand the basics of financial management for your business including tax, VAT, accounting and record keeping. It’s available to NHBF Members only. Not yet a Member? Join today.

What the NHBF says ...

The NHBF is sending an early warning to salon and barbershop owners that from April 2021, the National Living Wage will apply to those aged 23 and over (NLW currently applies to those aged 25 and above). The government also intends to reduce this further to anyone aged 21 and over by 2025.

Hilary Hall, NHBF chief executive said: “We can expect higher than inflation increases over the next five years given the government’s aim to raise rates to around £10.50 PH. No doubt this will put further pressure on salon finances as wages are such a high proportion of costs for service industries like salons. We will continue to work with government to ensure they support small businesses such as those in our sector during this increase.”

The NHBF campaigns at the highest levels on behalf of its Members to get the best outcomes for your business. Find out more.

Checklist 

• Make sure you know what the NLW and NMW rates are.
• Understand apprenticeships rates and don’t be caught out.
• Take positive action if you realise you are underpaying.
• Don’t underpay by mistake – for example, tips can’t be counted towards wages.
• Keep on top of staff birthdays – they may be entitled to an age-related pay rise during the year.
• Avoid being ‘named and shamed’ by the government.
• Take positive steps to boost your income to help cover costs.

More from the NHBF

Bookmark our website to make sure you’re up to date with all the latest news, views, information and advice relating to the hair, beauty and barbering industry.

Simply register for free to download these in-depth expert guides:

• Starting up
• Salon software
• Apprenticeships
• Pensions

Read more of our brilliant blog posts to gain expert business insights into key hair, beauty and barbering issues.

Become an NHBF Member for less than 80p a day to take advantage of our range of additional support tools and services to help you grow a profitable business.

Previous rates for 2018/19

National Minimum Wage 2019